SMEs lack adequate insurance cover

AmGeneral Insurance aims to change the mindset of small business owners by offering a comprehensive and tailor made insurance solutions to meet the needs of SME business

We believe having those levels of cover, both for motor and having a suite of fi re products, provide a signifi cant amount of coverage for SMEs.”— Roberts

Insurance is an issue every business owner needs to consider. Insurance is especially important to the small business owner because of the often close relationship between business and personal assets. However, with just over more than half of the country’s population underinsured, it should come as no surprise that most businesses also don’t see the need to buy insurance, or don’t buy enough with the common view that it is an unnecessary business cost.

AmGeneral Insurance Bhd CEO Derek Roberts told MALAYSIA SME® that SMEs in general tend to deprioritise insurance and are underinsured hence putting their companies and their livelihoods at risk. Roberts says it is important for mindsets to change and for business owners to not view insurance as a cost, but rather as mitigating risk.

Case in point is in the fire insurance segment which Roberts points out there is a big gap compared to the motor insurance segment.

“Motor insurance is mandatory in Malaysia so everyone has that, but for fire insurance there is a huge gap,” he says.

“Generally in Malaysia, we are underinsured from a property perspective. Historically, fire insurance was quite expensive which put off a lot of customers from taking out insurance and so with detariffi cation, this has allowed prices to be a lot more competitive and hence, liberalisation provides SMEs with the opportunity to get covered,” he explains.

Of course the hope is that you take out an insurance policy and never have to use it, but accidents happen. The advice to SMEs would be to get the right protection for your business,” he says.

Roberts believes that detariffi cation of motor and fire insurance will encourage the increase in the number of new and tailored insurance products into the market. He explains that through liberalisation insurers can freely tailor their new products and price them according to risk profile and customer preferences.

“The customer is the biggest beneficiary when it comes to liberalisation,” Roberts exclaims.

Since July 1 2017, the motor and fire insurance in Malaysia had experienced phased liberalisation. Tariffs or fixed premium rates that were previously in place had been gradually lifted and consumers have had access to better range of products at better prices with great service.

According to the General Insurance Association Malaysia (PIAM), for the past three decades, the premiums which insurance companies could charge consumers were regulated by a tariff structure. This resulted in a growing gap between premiums collected and claims paid out by insurers.

However, Roberts explains that since the liberalisation measures were introduced, AmGeneral has been able to bring new products to the market.

In response to the first phase of motor and fire tariff liberalisation implemented by Bank Negara Malaysia in July 2016, AmGeneral Insurance launched the ‘Auto 365 Comprehensive Premier’ a motor insurance product targeting highend customers.

AmGeneral Insurance Bhd also launched ‘All Risks 365’, which is its premier fire product and ‘Fire 365’ which is a product for businesses due to the increasing demand for basic fire de-tariff product at an affordable price.

‘Fire 365’ covers properties against perils such as fire and explosions. It also further offers additional coverage against fl ood, falling trees, earthquakes, riots and much more. With the cover, AmGeneral will also assist with repair cost, removal of debris and inconvenience benefit in the event of fire and flood.

Some of the key features of the product includes – up to RM7,500 to clear debris from uninsured property, inconvenience benefit of RM5,000 if your property is damaged by fire or flood and up to RM5,000 for temporary repair and protection cost.

Meanwhile, the ‘All Risks 365’ policy also covers damage caused by fire, and extends to static and mobile machines or equipment.

Roberts believes that AmGeneral’s comprehensive product suite will be able to provide either basic or premium coverage for SMEs.

“We believe having those levels of cover, both for motor and having a suite of fire products, would provide a signifi cant amount of coverage for SMEs. Also for AmGeneral it’s about our long term vision to be Malaysia’s most trusted insurer and to provide the right product with a right cover to the right customer which is absolutely fundamental to us,” he says.

Roberts also points out that AmGeneral is actively working to make it easy for SME owners to apply for the right type of insurance, in accordance to the right level of risk protection through its extensive network of agents across Peninsular Malaysia, Sabah and Sarawak.

He explains that AmGeneral is employing the use of digital channels to promote its brand and products, which would make it easier for SME owners to understand AmGeneral’s products and to buy them.

“One of the key themes we have is a digital agenda at AmGeneral, and we see that digital interactions or transactions are growing at a phenomenal rate, so as a business we are certainly embracing that. However, we are not about going
direct to customers, we are about going through our existing distributors using digital technology,” he adds.

While it is still possible for customers to browse and buy policies online, Roberts says he would strongly advise business owners to consult with its agents, who have a great deal of expertise.

“I think for some of the insurance that SMEs want or need, it’s not always that simple or easy and that’s where AmGeneral’s agents are able to explain the product, explain the differences and then empower the customers to make up their minds,” he says.

As one of Malaysia’s largest motor and leading general insurance companies in the market, AmGeneral has underwritten RM1.5 billion in gross written premium for the financial year 2017/2018 under its two well known, trusted brands – AmAssurance and Kurnia Insurance.

Together, AmAssurance and Kurnia, insure one in every six cars in Malaysia and are ranked top two in motor with a market share of 15%. For overall general insurance, AmGeneral Insurance is top five in overall market share as of first half of 2018.

AmGeneral generates business from a comprehensive range of general insurance solutions distributed through its network of 33 insurance branches servicing 7,000 agents and dealers, as well as through AmBank branches and customer touch points nationwide.